弘阳服务(01971) - 2025 - 中期业绩

Summary The company reported a 9.7% revenue increase to RMB 510.4 million in H1 2025, but gross profit and net profit declined due to rising costs and impairment losses Key Financial and Operating Indicators for the Six Months Ended June 30, 2025 | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Financial Performance: | | | | | Revenue | 510.4 | 465.3 | +9.7% | | Property Management Services Revenue | 420.0 | 375.4 | +11.9% | | Value-Added Services to Non-Property Owners Revenue | 11.0 | 20.3 | -45.8% | | Community Value-Added Services Revenue | 79.4 | 69.6 | +14.1% | | Gross Profit | 113.4 | 127.5 | -11.1% | | Gross Profit Margin | 22.2% | 27.4% | -5.2 percentage points | | Profit for the Period | 28.5 | 40.1 | -29.1% | | Profit Attributable to Owners of the Parent | 24.4 | 36.6 | -33.2% | | Operating Indicators: | | | | | Contracted GFA | 49.9 million sq.m. | 51.8 million sq.m. | -3.7% | | GFA Under Management | 48.2 million sq.m. | 47.1 million sq.m. | +2.3% | - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 (nil for the corresponding period in 2024)[3] Interim Results This section presents the condensed consolidated financial statements, including profit or loss, financial position, and detailed notes on accounting policies and key financial items Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Revenue grew by 9.7% to RMB 510.4 million, while gross profit and net profit decreased by 11.1% and 29.1% respectively, impacted by higher service costs and impairment losses Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 510,371 | 465,332 | +9.7% | | Cost of services | (396,971) | (337,795) | +17.5% | | Gross Profit | 113,400 | 127,537 | -11.1% | | Other income and gains | 1,671 | 1,515 | +10.3% | | Selling and distribution expenses | (1,020) | (636) | +60.4% | | Administrative expenses | (41,387) | (30,727) | +34.7% | | Net impairment losses on financial assets | (26,858) | (40,852) | -34.2% | | Profit before tax | 44,258 | 54,646 | -19.0% | | Income tax expense | (15,788) | (14,515) | +8.8% | | Profit for the period | 28,470 | 40,131 | -29.1% | | Profit attributable to owners of the parent | 24,444 | 36,602 | -33.2% | | Profit attributable to non-controlling interests | 4,026 | 3,529 | +14.1% | | Basic and diluted earnings per share | RMB 0.06 | RMB 0.09 | -33.3% | Condensed Consolidated Statement of Financial Position Total equity increased by 3.1%, and the asset-liability ratio improved to 40.6%, despite a 14.7% decrease in cash and bank balances Condensed Consolidated Statement of Financial Position (As at June 30) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Assets: | | | | | Total non-current assets | 272,158 | 283,121 | -3.9% | | Total current assets | 1,307,333 | 1,375,200 | -4.9% | | Cash and bank balances | 478,039 | 560,574 | -14.7% | | Liabilities: | | | | | Total current liabilities | 620,535 | 719,008 | -13.7% | | Total non-current liabilities | 21,408 | 30,235 | -29.2% | | Equity: | | | | | Total equity | 937,548 | 909,078 | +3.1% | | Other: | | | | | Net current assets | 686,798 | 656,192 | +4.7% | | Total assets less current liabilities | 958,956 | 939,313 | +2.1% | Notes to the Condensed Consolidated Financial Information Provides detailed disclosures on the group's operations, accounting policies, revenue breakdown, profit before tax, income tax, and analyses of trade receivables and payables 1. Company and Group Information - The Company was incorporated in the Cayman Islands on December 12, 2019, and listed on the Main Board of the Hong Kong Stock Exchange on July 7, 2020[8] - The Group's principal activities are the provision of property management services, value-added services to non-property owners, and community value-added services[9] 2. Basis of Preparation - The condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024[10] 3. Changes in Accounting Policies and Disclosures - The revised International Financial Reporting Standards accounting standards adopted for the first time in this period, including the amendments to IAS 21 (Lack of Exchangeability), have no significant impact on the condensed consolidated financial statements as the Group's transaction currencies are all exchangeable[11][12] 4. Operating Segment Information - Management aggregates all operating locations into a single reportable operating segment due to similar economic characteristics and business nature[13] - All of the Group's revenue is derived from mainland China, and no non-current assets are located outside mainland China, thus no geographical information is presented[14] Major Customer Revenue Contribution (For the six months ended June 30) | Customer | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Customer A | Not exceeding 10% of total revenue | 52,717 | 5. Revenue Revenue Analysis (For the six months ended June 30) | Business Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Property management services | 420,018 | 375,410 | | Value-added services to non-property owners | 10,993 | 20,321 | | Community value-added services | 79,360 | 69,601 | | Total | 510,371 | 465,332 | Customer Revenue Recognized by Timing (For the six months ended June 30) | Recognition Method | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Total customer revenue recognized over time | 427,937 | 391,626 | | Total customer revenue recognized at a point in time | 82,434 | 73,706 | 6. Profit Before Tax - Profit before tax is primarily affected by factors such as cost of services, depreciation and amortization, and net impairment losses on financial assets[20] Deductions/(Credits) Affecting Profit Before Tax (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of services provided | 396,971 | 337,795 | | Depreciation of property, plant and equipment | 4,636 | 3,530 | | Amortisation of other intangible assets | 7,999 | 8,133 | | Impairment losses on trade receivables | 2,086 | 13,984 | | Impairment losses on amounts due from related companies | 19,831 | 26,064 | 7. Income Tax Expense - Mainland China subsidiaries generally pay enterprise income tax at a 25% rate, with some western city subsidiaries enjoying a 15% preferential rate, and small and micro enterprises a 2.5% or 5% preferential rate[21] Income Tax Expense (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current tax: Enterprise income tax | 18,237 | 22,024 | | Deferred tax | (2,449) | (7,509) | | Total tax expense for the period | 15,788 | 14,515 | 8. Dividends - The Board has resolved not to declare an interim dividend for the six months ended June 30, 2025 (2024: nil)[23] 9. Earnings Per Share Attributable to Owners of the Parent - Basic earnings per share are calculated based on the profit attributable to owners of the parent and the weighted average number of 415,000,000 ordinary shares outstanding during the period[24][25] Basis for Basic Earnings Per Share Calculation (For the six months ended June 30) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the parent (RMB thousand) | 24,444 | 36,602 | | Weighted average number of ordinary shares outstanding (shares) | 415,000,000 | 415,000,000 | 10. Trade Receivables Ageing Analysis of Trade Receivables (As at June 30) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 221,541 | 186,521 | | 1 to 2 years | 62,408 | 71,535 | | 2 to 3 years | 17,931 | 25,855 | | Over 3 years | 6,223 | 6,025 | | Total | 308,103 | 289,936 | Credit Risk Information for Trade Receivables (As at June 30) | Ageing | Expected Credit Loss Rate (June 30, 2025) | Expected Credit Loss (June 30, 2025, RMB thousand) | Expected Credit Loss Rate (December 31, 2024) | Expected Credit Loss (December 31, 2024, RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Current | 3.61% | 8,303 | 2.95% | 5,662 | | 1 to 2 years | 6.50% | 4,340 | 7.52% | 5,816 | | 2 to 3 years | 16.48% | 3,538 | 15.32% | 4,676 | | Over 3 years | 47.83% | 5,705 | 37.70% | 3,646 | | Total | 6.63% | 21,886 | 6.39% | 19,800 | 11. Trade Payables Ageing Analysis of Trade Payables (As at June 30) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 118,556 | 179,903 | | Over 1 year | 2,368 | 3,873 | | Total | 120,924 | 183,776 | 12. Other Payables and Accrued Expenses Other Payables and Accrued Expenses (As at June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Collections on behalf of community residents for utilities | 23,920 | 49,849 | | Deposits received | 60,861 | 65,979 | | Other payables for taxes | 31,514 | 27,795 | | Accrued salaries and welfare | 22,669 | 22,138 | | Others | 4,119 | 11,910 | | Total | 143,083 | 177,671 | 13. Share Capital Share Capital (As at June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Issued and fully paid ordinary shares (415,000,000 shares of HK$0.01 par value each) | 3,764 | 3,764 | Management Discussion and Analysis This section reviews the company's performance in H1 2025, discusses its business model, operational and financial results, liquidity, and outlines the strategic outlook for H2 2025 Review of H1 2025 The property management sector faced economic pressures, shifting to quality-driven growth, with the Group achieving strategic transformation and ranking 16th among top service providers - The property management industry's scale expansion logic is being reshaped, focusing on core city clusters like the Yangtze River Delta and Greater Bay Area, with slower growth in managed area and an accelerated shift from scale-driven to quality-driven competition[31] - The national "14th Five-Year Plan" mandates smart property services, with core cities incorporating smart community construction into urban assessment systems[31] - In H1, the Group's strategy focused on "penetrating Greater Jiangsu," "deepening the Yangtze River Delta," and "strengthening central cities" to build a national development pattern, transforming towards quality and efficiency-driven growth by focusing on high-value regions, enhancing service depth, and integrating regional resources[32] - New school and data center property types were added, consolidating the core business, while the investment segment made precise and breakthrough progress[32] - The 2025 new three-year strategic development plan was released, identifying ten key cities for deep cultivation and planning to establish quality strongholds, with the first batch covering 8 cities and 13 projects[33] - The Group ranked 16th among "2025 China Property Service Top 100 Enterprises" and received honors as "2025 China Property Service Top 100 Satisfaction Leading Enterprise" and "2025 China Red Property Service Excellent Enterprise"[34] Key Operating and Financial Data for H1 2025 | Indicator | June 30, 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Contracted GFA | 49.9 million sq.m. | 51.8 million sq.m. | -3.7% | | Total GFA Under Management | 48.2 million sq.m. | 47.1 million sq.m. | +2.3% | | Revenue | RMB 510.4 million | RMB 465.3 million | +9.7% | | Gross Profit | RMB 113.4 million | RMB 127.5 million | -11.1% | | Net Profit | RMB 28.5 million | RMB 40.1 million | -29.1% | Business Review The Group's revenue increased by 9.7%, driven by property management and community value-added services, but overall profitability declined due to rising service costs Our Business Model - The Group adheres to the strategy of "penetrating Greater Jiangsu, deepening the Yangtze River Delta, and expanding into urban clusters," providing property management services, value-added services to non-property owners, and community value-added services with a "customer-centric" philosophy[36] Property Management Services - Provides comprehensive services including security, cleaning, landscaping, facility management, customer service, and maintenance, covering residential, commercial, and other non-residential properties (e.g., shopping malls, office buildings, schools)[36] Value-Added Services to Non-Property Owners - Includes consulting services, preliminary planning and design consultation, co-selling services, acceptance services, and property repair services, primarily for real estate developers and other property management companies[37] Community Value-Added Services - Offers eight categories of services to residential property owners and residents, including property agency, home beautification, community convenience, public area value-added services, smart solutions, retail, asset management, and home decoration[37] Revenue Analysis Total Revenue Breakdown by Business Line (As at June 30) | Business Line | 2025 (RMB thousand) | Share (%) | 2024 (RMB thousand) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Property management services | 420,018 | 82.3 | 375,410 | 80.6 | | Value-added services to non-property owners | 10,993 | 2.2 | 20,321 | 4.4 | | Community value-added services | 79,360 | 15.5 | 69,601 | 15.0 | | Total | 510,371 | 100.0 | 465,332 | 100.0 | Property Management Services Revenue, GFA Under Management, and Number of Projects by Developer Type (As at June 30) | Developer Type | 2025 Revenue (RMB thousand) | 2025 Number of Projects | 2025 GFA Under Management (thousand sq.m.) | 2024 Revenue (RMB thousand) | 2024 Number of Projects | 2024 GFA Under Management (thousand sq.m.) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Hongyang Group | 166,735 | 98 | 17,624 | 167,530 | 100 | 17,255 | | Third-party real estate developers | 253,283 | 225 | 30,607 | 207,880 | 199 | 29,833 | | Total | 420,018 | 323 | 48,231 | 375,410 | 299 | 47,088 | Property Management Services Revenue, GFA Under Management, and Number of Projects by Property Type (As at June 30) | Property Type | 2025 Revenue (RMB thousand) | 2025 Number of Projects | 2025 GFA Under Management (thousand sq.m.) | 2024 Revenue (RMB thousand) | 2024 Number of Projects | 2024 GFA Under Management (thousand sq.m.) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Residential properties | 352,785 | 252 | 43,770 | 319,418 | 243 | 42,584 | | Non-residential properties | 67,233 | 71 | 4,461 | 55,992 | 56 | 4,504 | | Total | 420,018 | 323 | 48,231 | 375,410 | 299 | 47,088 | Property Management Services Revenue, GFA Under Management, and Number of Projects by Geographical Distribution (As at June 30) | City | 2025 Revenue (RMB thousand) | 2025 Number of Projects | 2025 GFA Under Management (thousand sq.m.) | 2024 Revenue (RMB thousand) | 2024 Number of Projects | 2024 GFA Under Management (thousand sq.m.) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Nanjing | 118,274 | 95 | 12,962 | 134,980 | 94 | 12,966 | | Jiangsu (excluding Nanjing) | 99,567 | 81 | 14,644 | 66,213 | 75 | 13,628 | | Shanghai | 4,466 | 1 | 601 | 9,863 | 2 | 808 | | Anhui | 47,021 | 35 | 7,269 | 42,713 | 36 | 8,210 | | Shandong | 773 | 1 | 100 | – | – | – | | Hunan | 9,067 | 9 | 1,111 | 8,806 | 9 | 1,110 | | Henan | 2,164 | 1 | 239 | 2,140 | 1 | 239 | | Zhejiang | 16,559 | 11 | 1,331 | 22,796 | 15 | 1,745 | | Hubei | 76,168 | 47 | 5,617 | 59,913 | 36 | 4,558 | | Chongqing | 16,278 | 8 | 1,101 | 10,902 | 8 | 1,102 | | Guangdong | 7,634 | 6 | 685 | 745 | 3 | 411 | | Jiangxi | 4,210 | 3 | 411 | 2,814 | 6 | 685 | | Sichuan | 16,217 | 17 | 1,743 | 11,916 | 13 | 1,540 | | Shaanxi | 1,620 | 8 | 417 | 1,609 | 1 | 86 | | Total | 420,018 | 323 | 48,231 | 375,410 | 299 | 47,088 | - Total revenue increased by 9.7% year-on-year to RMB 510.4 million, primarily due to increased revenue from property management services and community value-added services[45] - Property management services revenue increased by 11.9% year-on-year to RMB 420.0 million, mainly due to an increase in projects[46] - Value-added services to non-property owners revenue decreased by 45.8% year-on-year to RMB 11.0 million, primarily due to a reduction in sales venue projects[47] - Community value-added services revenue increased by 14.1% year-on-year to RMB 79.4 million, mainly driven by increased revenue from community retail services[48] Cost of Services - Cost of services increased by 17.5% year-on-year to RMB 397.0 million, primarily due to increased staff costs and outsourcing costs for property management projects[49] Gross Profit and Gross Profit Margin - Gross profit decreased by 11.1% year-on-year to RMB 113.4 million, mainly due to increased property management service costs[50] Gross Profit Margin by Business Line (As at June 30) | Business Line | 2025 Gross Profit Margin (%) | 2024 Gross Profit Margin (%) | Change (percentage points) | | :--- | :--- | :--- | :--- | | Property management services | 20.0 | 26.4 | -6.4 | | Value-added services to non-property owners | 15.0 | 15.0 | 0.0 | | Community value-added services | 35.1 | 36.6 | -1.5 | | Total | 22.2 | 27.4 | -5.2 | - The gross profit margin for property management services decreased by 6.4 percentage points, mainly due to increased staff costs and outsourcing costs[51] - The gross profit margin for community value-added services decreased by 1.5 percentage points, primarily due to a decrease in the average selling price of parking spaces and an increased revenue contribution from lower-margin community retail businesses[52] Other Income and Gains - Other income and gains increased year-on-year to RMB 1.7 million, mainly due to increased government grants[53] Administrative Expenses - Administrative expenses increased by 34.9% year-on-year to RMB 41.4 million, primarily due to an increase in project management personnel[54] Net Impairment Losses on Financial Assets - Net impairment losses on financial assets decreased year-on-year to RMB 26.9 million, mainly due to a decrease in impairment provisions for amounts due from related companies[55] Profit Before Tax - Profit before tax decreased by 19.0% year-on-year to RMB 44.3 million[56] Income Tax Expense - Income tax expense increased by 9.0% year-on-year to RMB 15.8 million, primarily due to a decrease in deferred income tax expenses[57] Liquidity, Reserves and Capital Structure The Group maintained a sound financial position with a 3.1% increase in total equity and a reduced asset-liability ratio, despite lower cash balances - As at June 30, 2025, current assets were RMB 1,307.3 million, a slight decrease from December 31, 2024[58] - Cash and bank balances were RMB 478.0 million, a 14.7% decrease from December 31, 2024[58] - The asset-liability ratio (total liabilities divided by total assets) was 40.6%, a 4.6 percentage point decrease from 45.2% as at December 31, 2024[58] - Total equity was RMB 937.5 million, a 3.1% increase from December 31, 2024, primarily due to growth from operating profit[58] - Trade receivables were RMB 308.1 million, an increase of approximately 6.3% from December 31, 2024, mainly due to an increase in the number of projects under management[59] - Prepayments, other receivables, and other assets were RMB 120.1 million, a decrease of approximately 9.7% from December 31, 2024, mainly due to a decrease in prepayments made to utility suppliers on behalf of customers[60] - Trade payables were RMB 120.9 million, a decrease of approximately 34.2% from December 31, 2024, mainly due to shorter payment terms for outsourcing suppliers[61] - Contract liabilities were RMB 258.0 million, largely consistent with December 31, 2024[62] - Other payables and accrued expenses were RMB 143.1 million, a decrease of approximately 19.5% from December 31, 2024, mainly due to a decrease in payables to utility suppliers on behalf of customers[63] - As at June 30, 2025, the Group had no significant contingent liabilities or guarantees[64] Outlook for H2 2025 The Group plans to enhance service innovation, optimize resource allocation, improve operational efficiency, and strengthen organizational capabilities for sustainable growth - In the second half of the year, the Group will continue to expand into new sectors, refine advantageous areas, and balance business growth with existing operations to achieve sustainable and quality growth in business scale and profit[65] - Core Capability Building: - Sharpening Service Innovation: Deepen customized standards for various property types, expand the value-added service chain, and accelerate the implementation of smart platforms and IoT tools[65] - Aggregating Resource Focus: Establish a "headquarters coordination + regional linkage" mechanism, deeply cultivate core urban clusters, expand into new scenarios such as urban services and public facilities, and address capability gaps through strategic joint ventures and acquisitions[66] - Refining Efficient Operations: Optimize the "selection, cultivation, utilization, and retention" mechanism, compile service manuals for all property types, promote mobile management platforms across all regions, and achieve online and data-driven service processes[66] - Focus on investment-led strategy, strengthen standard construction, promote the implementation of multi-property standardized operating guidelines, complete service plans and operational bottom-line checklists, and optimize investment mechanisms[67] - Enhance organizational leadership, deepen the flat organizational structure, and cultivate four key talent teams: "General Plan," "Hong Elite Plan," "Hong Steward," and "Hong Guard"[68] - Foster cultural cohesion, uphold the core values of "people-oriented business, integrity leads to success," with core principles of "health, striving, great love, pragmatism, simplicity, vitality, sunshine, humanistic care, cross-functional collaboration, and direct problem-solving"[69] Corporate Governance / Other Information This section covers significant investments, employee policies, post-reporting events, dividend policy, securities transactions, foreign exchange risk, and compliance with corporate governance standards 1. Material Investments, Acquisitions and Disposals The Group engaged in significant parking space transfers and equity acquisitions totaling approximately RMB 488.61 million, which are pending completion - On February 17, 2025, the Company entered into a parking space transfer framework agreement with Hongyang Group, whereby the Company conditionally agreed to purchase the property rights or usage rights of target parking spaces for a total consideration of approximately RMB 230.92 million[70] - Nanjing Hongshenghuo Property Consulting Co., Ltd. (an indirect wholly-owned subsidiary of the Company) entered into equity transfer agreements with indirect wholly-owned subsidiaries of Hongyang Group to acquire 70% equity in Chengdu Hongsheng Heding Real Estate Development Co., Ltd. (consideration of approximately RMB 142.4 million), 20% equity in Suqian Tongjin Hongzhiye Co., Ltd. (consideration of approximately RMB 73.95 million), and 19% equity in Jurong Jinjiarun Real Estate Development Co., Ltd. (consideration of approximately RMB 41.34 million)[71] - The aforementioned acquisitions were not completed as at June 30, 2025[72] 2. Employees and Remuneration Policy The Group employs 2,799 staff, with remuneration based on performance and market rates, supported by comprehensive talent development programs Employee Headcount (As at June 30, 2025) | Category | Number of Employees | | :--- | :--- | | Total employees | 2,799 | | Residential property management and related services | 2,326 | | Non-residential property management and related services | 473 | - Employee remuneration is determined based on responsibilities, work performance, and market levels, complemented by competitive employee incentive plans and comprehensive talent development programs[73] - Three-tier talent development programs, "General Plan," "Hong Elite Plan," and "Hongyao Plan," are designed for key talents, alongside systematic "Hong Steward" and "Hong Master" training platforms[74] 3. Events After Reporting Period No significant events occurred after the reporting period ended June 30, 2025 - The Company did not undertake any significant events after June 30, 2025[75] 4. Interim Dividends The Board does not recommend paying any interim dividends for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[76] 5. Purchase, Sale or Redemption of the Company's Listed Securities Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during the reporting period, holding no treasury shares - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[77] - As at the end of the reporting period, the Company did not hold any treasury shares[77] 6. Exposure to Foreign Exchange Risk The Group primarily operates in China, with most transactions denominated and settled in RMB, and will continue to monitor foreign exchange activities to protect cash value - The Group primarily operates in China, with most transactions denominated and settled in RMB[78] - The Group will continue to monitor foreign exchange activities and make its best efforts to safeguard the Group's cash value[78] 7. Compliance with Corporate Governance Code The company adheres to the Corporate Governance Code of the HKEX Listing Rules, confirming full compliance during the reporting period - The Company has adopted the Corporate Governance Code set out in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited as its corporate governance standards[79] - To the best knowledge of the Directors, the Company has complied with all applicable code provisions in Part 2 of the Corporate Governance Code during the reporting period[79] 8. Model Code for Securities Transactions by Directors The company adopted the Model Code for securities transactions by directors, with all directors confirming compliance during the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules as the code for directors' dealings in the Company's securities[81] - The Directors confirm that they have complied with the required standards set out in the Model Code throughout the reporting period[82] 9. Audit Committee and Review of Interim Results The Audit Committee, comprising four members, reviewed and confirmed the unaudited interim results for H1 2025, ensuring compliance and adequate disclosure - The Board has established an Audit Committee in accordance with the Corporate Governance Code, with primary responsibilities including reviewing and monitoring the Group's financial reporting process, internal controls, and risk management systems[83] - The Audit Committee consists of four members, including three independent non-executive directors and one non-executive director, with Mr. Zhao Xianbo as Chairman[83] - The Audit Committee has reviewed the Company's unaudited condensed consolidated interim results for the six months ended June 30, 2025, and confirmed that they comply with all applicable accounting principles, standards, and requirements, and provide adequate disclosure[83] 10. Publication of Interim Results and 2025 Interim Report on HKEX and Company Website The interim results announcement is published on the HKEX and company websites, with the full interim report to be made available to shareholders - This announcement is published on the HKEX website (www.hkexnews.hk) and the Company's website (www.rsunservice.hk)[84](index=84&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will be provided to the Company's shareholders and published on the aforementioned websites in due course[84]